Households expect inflation to stay in double digits: Survey

Mumbai: Households expect inflation to remain unchanged in double digits for the next three months, with many believing that inflation may even fall, an RBI-sponsored survey showed Tuesday.

"... The majority of the respondents continue to expect similar or lower rate of price change or expects the prices to remain unchanged or even fall," it said.

Households expect inflation to be 10.5 percent in the next three months, up from 10.1 percent in the previous survey. The current inflation expectation is 9.9 percent.

Inflation expectations of households remained elevated in double digits in response to recent month-on-month increases in prices of vegetables and pulses, RBI said.

The proportion of respondents expecting prices to rise by 'more than the current rate' for prices in general as well as those in various product groups has decreased nominally compared with the previous round of survey, it said.

The Inflation Expectations Survey of Households for September 2015 (41st round) captured inflation expectations of 4,903 urban households across 16 cities for the next three months and the next one year.

WPI inflation continues to be in the negative zone since November 2014 while retail inflation touched a record low of 3.66 percent in August.

Meanwhile, a survey of professional forecasters on macroeconomic indicators put up on the RBI Website said real Gross Value Added at basic price (GVA) will increase by 7.4 percent in 2015-16.

In 2016-17, GVA is expected to increase by 8 percent.

Agriculture & allied activities and services are expected to grow 1.5 percent and 9.4 percent, respectively. Industry growth forecast has been placed at 6.7 percent.

Another survey revealed that the outlook on business sentiment remained range-bound in the third quarter of 2015-16.

"This could be attributed to the reduced pessimism in inventory of raw material, inventory of finished goods along with the reduced optimism in exports. Also, reduced pessimism is observed in the cost of finance and cost of raw material," the survey said.